Vail Resorts to operate Canyons Resort in Park City
June 3, 2013
BROOMFIELD — Vail Resorts said Wednesday it will take over operations of Canyons ski resort in Utah under a lease agreement with Canadian resort operator Talisker Corp.
Colorado-based Vail said the agreement could bring new lease income from neighboring Park City Mountain Resort, which rents land from Talisker. The neighbor is suing Talisker for trying to raise its rent under the threat of eviction, in what some industry players saw as a play by Toronto-based Talisker to take over Park City Mountain Resort.
Wednesday's announcement seemed to change the equation.
"We welcome Vail Resorts to the Utah ski community and look forward to working with them to continue to grow Utah's ski industry," Jenni Smith, president and general manager of Park City Mountain Resort, said in a statement to The Associated Press.
Smith added, "As we have for the last 50 years, we remain committed to owning and operating Park City Mountain Resort and will continue to work toward a fair resolution of the lease dispute."
For his part, Vail CEO Rob Katz didn't know what to make of Talisker's effort to win congressional approval for a 2-mile gondola linking Canyons and another Utah ski area, Solitude.
The U.S. Forest Service opposes a land sale for the gondola line. Backcountry skiers are protesting any incursion on undeveloped alpine bowls of the upper Wasatch Range. Salt Lake City officials also oppose any additional development that could threaten the city's water supply.
"That's something we're going to have to study and get up to speed on," Katz told stock analysts in a conference call Wednesday. "It's not something I can respond to yet because it's obviously a complex issue that requires good attention and careful consideration."
Katz said the deal for 4,000-acre Canyons gives Vail Resorts a presence in Utah, something the company has long sought. In 2007, when Talisker snapped up Canyons from defunct American Skiing Co., Vail sued, claiming it had offered more money. After failing to stop the sale, Vail withdrew its lawsuit in 2009.
Utah has "one of the best ski markets in America," Katz said in an interview Wednesday, while declining to say if Vail's takeover of Canyons would bring layoffs in Utah.
"We're always focused on being efficient, but we haven't done any analysis yet, so I'm not ready to say where that's going," Katz said. The deal also gives Vail another destination to add to its annual pass, known as Epic Pass.
Vail said it will make inflation-linked payments starting at $25 million a year to Talisker, plus an amount linked to earnings from resort operations. Talisker retains development rights for 4 million square feet of real estate at Canyons.
Vail said it initially expects untaxed earnings of $15 million annually, increasing to $25 million annually by 2017. That doesn't include any potential income from the Park City Mountain Resort property, the company said.
The lease has an initial term of 50 years and six 50-year renewal options. Vail Resorts subsidiaries operate the Vail, Beaver Creek, Breckenridge and Keystone resorts in Colorado, Heavenly, Northstar and Kirkwood in California and Nevada, Afton Alps in Minnesota, Mount Brighton in Michigan and Grand Teton Lodge in Wyoming.
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